Working Papers

Investigating Defensive Medicine: The Role of Access

Javier Cano-Urbina, Daniel Montanera

Defensive medicine is the treatment decisions by physicians made primarily to limit malpractice liability risk, rather than for the medical benefit of patients. Despite widespread reports of defensive medicine in surveys of physicians, empirical investigations have produced conflicting evidence. This paper develops a model of the interactions in the health care market that shows that rises in medical malpractice pressure have non-monotonic effects on health care spending. The key element in the model is the endogenous determination of access to health care, which reacts to changes in medical malpractice pressure. This implication is tested using the Vital Statistics Natality Birth Data and data on tort reforms by state-month-year, and it is found that, in general, the non-monotonic relationship predicted by the model is supported.

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Paper Keywords

defensive medicine, obstetrics, healthcare spending